Chevron (CVX) executives cut their buyback budget for the next three months in response to an oil market that continues to look shaky.

During the oil giant’s first-quarter earnings call on May 2, executives said the move was well within the range of Chevron’s usual adjustments for market volatility.

“We've been through these cycles before, we know what to do, we know how to manage it,” said Mike Wirth, Chevron CEO and chairman of the board.

The company beat market expectations with $3.8 billion in earnings for the quarter, with adjusted earnings per share hitting $2.18 versus a consensus of $2.13 a share, according to TD Cowen.

The projected cuts in share buybacks reflect a macro-environment on crude price trends, Wirth said. Proposed tariffs from the Trump administration and OPEC’s recent announcement of production increases in May have caused oil prices to plummet.

WTI spot prices were below at $58.24/bbl on the afternoon of Chevron’s earnings call. Since announcement of the tariffs and OPEC production increases, prices have fallen roughly 19% from $72.12/bbl.

Chevron spent about $3.9 billion in share repurchases in the first quarter and expects to spend between $2 billion and $3.5 billion this quarter. If the company maintains the same rate, Chevron would spend between $11.5 billion and $13 billion for the year, Reuters reported on May 2.

The company’s budgeted range for 2025 repurchases is between $10 billion and $20 billion. Wirth said the upper end of the range is still possible for 2025, depending on the price of crude.

“More than two years ago, we introduced guidance on the buybacks with a range of $10 to $20 billion based on a view of the external environment,” Wirth said. “The high end of that was premised on a strong outlook on the commodity, the lower end of that was based on a weaker outlook for the commodity, and I think it was $85-ish on the top end and $60-ish on the bottom end.”

Buybacks are the company’s third financial priority, after dividend growth and capital investment, he said.

Chevron plans to continue expanding production. The company produced its first oil on its Ballymore Project in the Gulf of Mexico in April. The platform, along with other recent startups, will add 300,000 boe/d by 2026, the company said.

California ‘socialist state’

Wirth also discussed ongoing regulatory developments in California. The company has two refineries in the state.

On April 16, independent refinery company Valero announced it was shutting down or repurposing its California facility over the next year. Phillips 66 had earlier announced it would shut down its refinery in Los Angeles by the end of 2025.

Wirth criticized the state’s regulatory regime, saying that “central economic planning” has not worked in other “socialist states” and would likely not work in California. The CEO also discussed the state’s move in 2024 to involve itself in refinery turnaround periods. 

“We've been pretty vocal that the policies coming out of the state make it nearly impossible to invest in California going forward; the result of that has been significantly higher costs for consumers than in the rest of the country,” he said.

The CEO added, however, that Chevron’s refineries are in a strong financial position in the region’s marketplace.

“We do not have any announcements on our refineries at this time,” he said.

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